Now that the dust has settled on the FOMC minutes this may well be old news, but a useful recap.
Like the title says, this is GS 'bottom line' on what the FOMC minutes all add up to … bolding is mine
Bottom line:
- The minutes of the May FOMC meeting retained the upbeat growth outlook and recognition of firmer inflation data characteristic of recent Fed communications.
- While comments about the potential desirability of a modest inflation overshoot and the possibility of modifying the statement's forward guidance section were dovish surprises, the minutes also indicated increased confidence in the inflation outlook.
- The minutes also raised the possibility of adjusting the interest rate on excess reserves, in light of recent increases in the effective fed funds rate toward the top of the target range.
- Participants generally agreed that such a change would be appropriate "sooner rather than later," and we believe implementation is indeed likely at the June meeting (this would be consistent with the post-minutes rally in near-term Fed Funds futures).
- Taken together, we left our subjective odds of a June hike unchanged at 95%.
